The policy rate is the key going forward,said PIMCO founder and co-CIO Bill Gross,the "Bond King."We at PIMCO think it's gonna stay low for a long,long time.We think that unemployment of 6.5% is their target.We think the policy rate is the key, and has to stay down there to anchor and keep other rates low.*
Every week that we keep the government shut down subtracts 0.10% from GDP.Ultimately,the possibility of default is a million to one.The uncertainty going forward is not good for the Treasury rate.Every month,the Treasury brings in 300 billion dollars,and pays out 45 billion.It wouldn't even think about defaulting.*
The Total Return Fund suffered rather significant outflows,but September was a magical month,and investors are coming back.*
As for overseas investing,Brazil has particular problems in terms of its infrastructure and pension payments.It's not the paradise many investors had thought,Bill Gross observed.*
Despite outflows for five consecutive months,PIMCO's Total Return Fund is regarded as a core bond holding by many.It is the world's largest mutual fund.It saw 5.4 billion dollars of outflows in September,and 28.7 billion of outflows year to date.That's -10.1% of assets under management.This decline in popularity is pegged to a Wall Street notion that the Federal Reserve will soon begin hiking rates-a belief that hasn't been supported by the continuing slow pace of the recovery from the financial crisis and the drag of fiscal uncertainty.
The fund closed at 10.82 a share on Monday,down 0.09%.Nonetheless,Morningstar Associates gives it an outstanding five star rating.The fund has very low expenses of 0.46%,and bonds are still considered an essential element of a balanced portfolio.Over the long term,you are better off having significant exposure to the bond market.Among bond mutual funds,Total Return remains the clear favourite.*
PIMCO Total Return Fund(PTTRX),PIMCO Total Return ETF(BOND)